New Laws for California Employers

There were surprisingly few new employment laws becoming effective on or before January 1, 2006. However, some of the laws that were enacted which employers need to be aware of are discussed below.

Termination Paycheck: Labor Code § 213 now allows to pay final wages by direct deposit if the employee already received his or her paycheck in that manner. This can be helpful if the former employee refuses to participate in an exit interview or to avoid other confrontations. The employer still must abide by existing regulations to pay final wages in a timely fashion.

Overtime for Computer Software Employees: Labor Code § 515.5 changes the over-time exemption for employees in the computer software field. Previously, an employee "in the computer software field" was considered exempt from over-time requirements if certain conditions were met, including the payment of not less than $41.00 per hour. The exemption is also met if the employee receives an annualized full-time salary equivalent to that hourly rate.

Paychecks: Beginning July 21, 2005, Labor Code § 226 changes the information that must be disclosed on an employee's paycheck. The law previously required employers to provided employees with an accurate itemized paycheck that included, among other things, the employeeÂ’s name and social security number. Due to identify theft concerns, the Legislature added section 226 to prevent inclusion of an employeeÂ’s social security number on paychecks and required that, by no later than January 2008, employers include on an itemized wage statement no more than the last four digits of the employeeÂ’s social security number or an existing employee identification number. The 2005 amendment clarified that the identification number must not be the employeeÂ’s social security number.

Marital Status and Sexual Orientation Protected by The Unruh Act: Assembly Bill 1400 amended the Unruh Civil Rights Act to clarify that discrimination based upon marital status and sexual orientation is also precluded by this Act.

Hate Crime Statute of Limitations: Civil Code § 52 and California Code of Civil Procedure § 338 were amended to extend the statute of limitations for civil actions based on hate crimes from one year to three years. Although this new law does not directly apply to employment claims, it will affect California businesses as it is part of The Civil Rights Act of 2005.